Active Fintech ETF Debuts

Yesterday, ARK Invest rolled out an actively managed ETF covering the fintech space. The ARK Fintech Innovation ETF (ARKF) is in line with the firm’s focus on disruptive innovation; in this case, financial technology innovation.

ARKF comes with an expense ratio of 0.75% and lists on the NYSE Arca exchange.

Methodology

Companies eligible for inclusion must either generate significant portions of their revenue or market value from fintech innovation or have declared that its primary business focus is providing products and services in the field of fintech innovation, according to the prospectus, with managers making high-conviction portfolio selections from across the equity size spectrum.

The firm uses internal and external research to determine the degree to which companies bring disruptive innovation to the fintech space, meaning its analysts are looking at how companies are leveraging technology to deliver products and services that change the way the financial sector works, the document says.

The prospectus also notes that the companies that are under consideration are involved in e-commerce, transactional innovation, payment platforms, peer-to-peer lending and blockchain technologies, among other activities.

The Global X FinTech ETF (FINX) launched in September 2016 and currently has $282 million in assets under management. However, it tracks a cap-weighted index and is designed to represent the fintech space rather than seek out disruptive innovators.